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Friday, May 06, 2011

Press releases 2011 -

OFT secures enforcement orders against holiday club companies

58/11 6 May 2011

The OFT has obtained enforcement orders in the High Court against two companies and seven individuals stopping them using sales and marketing practices the OFT considers to be misleading or otherwise unlawful when selling and marketing holiday club memberships and other holiday based products.

The OFT was concerned that holders of timeshare products attended presentations on the promise of being able to dispose of their timeshares, with their maintenance charges, when in fact they were subjected to lengthy and high pressure sales pitches to be sold expensive holiday club memberships costing large sums, in some cases up to £12,000. Sales staff told these holders they could get back up to 95 per cent of these sums under a 'reclaim' scheme but did not explain the restrictions that applied, and often played on their fears that their children would otherwise be liable for timeshare maintenance fees. Many consumers subsequently wished to cancel their holiday club memberships but were not allowed to.

Interim enforcement orders were obtained against Personal Travel Group Limited (PTG), Geo Demographic Market Research Limited (GDMR) and two individuals who are directors of PTG and were directors of Incentive Leisure Group Limited (ILG). Final enforcement orders were obtained against five individuals associated with PTG and GDMR, one of whom was also a former director of ILG.

Amongst other things the orders prohibit the companies and the individuals from engaging in misleading sales practices when dealing with people who want to dispose of their timeshares, and require consumers to be given cancellation rights in certain circumstances.

The orders follow the launch of High Court proceedings by the OFT in December 2010 against these companies and individuals for their involvement in activities which the OFT believes breach consumer protection law.

The interim enforcement orders against PTG, GDMR and the individuals concerned will last until there is a final hearing of the OFT's court action. A date for the final hearing has not yet been set.

The final enforcement orders conclude the OFT's action against the individuals concerned.

No interim enforcement order was sought against ILG as it is not trading and is in liquidation in Gibraltar. However, the OFT is monitoring the progress of the liquidation and intends to continue its action through the High Court against the company.

Jason Freeman, Director in the OFT's Goods and Consumer Group, said:

'The enforcement orders put a stop to activities that we consider to be unlawful, and which we believe were causing serious harm to consumers.

'It is important that traders do not mislead consumers or exploit their fears in order to make a hard sell. In particular, these are contracts where we believe consumers should have been given cancellation rights and we are pleased that the traders have accepted that they have to give notice of such rights in accordance with the law.'

The content of the orders was agreed by the companies, the individuals and the OFT, and approved by the Court.

NOTES

The interim and final enforcement orders were made under Part 8 of the Enterprise Act 2002 and sealed by the High Court on 19 April 2011.

Under Part 8 of the Enterprise Act 2002 the court may make an enforcement order which requires the companies and individuals named to cease or discontinue any breaches of consumer protection laws that may have occurred.

If a company or person breaches an interim or final enforcement order, they can be held in contempt of court which could lead to a fine, imprisonment or the seizure of their assets.

Interim orders have been made against PTG, Keith Barker and Kimberley Bambroffe. Mr Barker was a director of ILG, and is a director of GDMR and PTG. Ms Bambroffe was a director of ILG and is a director of PTG.

Final orders were made against Martin White, Jonathan Daniels, Mark Gales, Robert Knight and Lily Alderson. Martin White was a former director of ILG. Mr. Gales, Mr. Knight and Ms Anderson were involved in the management of and sales by one or more of the companies involved in this case.

For more information see the case summary in respect of this investigation. The interim and final enforcement orders are also available on this page.

Trading Standards Services in Edinburgh, Milton Keynes, North Somerset and Durham assisted the OFT during this investigation. The OFT also received assistance from many other Trading Standards Services in respect of the investigation.

The OFT does not provide advice or resolve individual complaints for consumers. Consumer information is available from www.direct.gov.uk/consumer For further assistance consumers should consider obtaining independent legal advice.